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    3 Replies Latest reply on Jan 10, 2015 6:02 PM by JerryChau

    Real Estate Brokerage business in CA

    nataliewu Wayfarer

      Hello there,


      I have got my broker license in CA and am looking to start my own brokerage business in CA (focus on buying, selling, property management, relocation of residential homes) and my plan is to hire 1-2 licensed real estate agents in 3 months and work as a team. My questions are: 
      1. Should I start a partnership, LLC or Corporation (if so, S-corp or C-corp?)
      2. Can I hire the licensed real estate agents as my business partners, rather than an employee?

      3. Do I have to buy the annual E&O insurance?


      Thanks in advance!


        • Re: Real Estate Brokerage business in CA
          Moderator Berta Guide

          Hi Nataliewu,


          Welcome to the community & congratulations on getting your brokerage license!


          To answer you questions, this would be my advice:


          1. Contact the SBA or a business attorney to go over the pros & cons of each option so you can decide which is best for you.


          2. Again, a business attorney should be able to guide you in the legalities of each of these options and help you decide which is the best way to go.


          3. As a former insurance agent, I strongly recommend the E&O insurance as a form of protection for your business.


          I'm sure some of our other members have more recommendations or thoughts to share  with you. Again, congratulations.


          Best wishes,



          • Re: Real Estate Brokerage business in CA
            JerryChau Tracker

            Hiya nataliewu,


            Most real estate companies form LLCs or S corps. In both cases it depends upon how you intend to grow and the Calif. laws. Also, in most states, real estate salespeople form a separate companies and may not be considered your employees for tax or legal purposes. (get professional advice) Even so, the Calif. real estate laws will likely require that the broker have responsibilities for the actions of the individual licensees as set for in state law.


            Log on to your state’s real estate commission site for more information. You can usually find it on the secretary of state’s site. Also check with your county’s chapter of the Board of REALTORS®.


            Hiring one or two agents may not be economically feasible to cover your overhead and make a profit. I recommend that you run the numbers. An alternative is to work under another licensed brokerage company that charges the teams a minimal cut on sales. REMAX is one such company but it charges a high rental fee and you have to produce lots of sales for it to work. Most REMAX teams are well established before joining.


              Jerry Chautin <---- Licensed in Georgia
            SCORE certified business mentor, coach, counselor
            all volunteer, non-profit resource partner